Plain English Breakdown
The official text does not define specific 'foster care expenses,' leaving the exact eligible costs unclear until DCFS and Revenue issue rules.
Illinois Foster Care Tax Credit
This law creates a new tax credit for Illinois foster parents who pay expenses to care for children in the state's custody.
What This Bill Does
- Creates an income tax credit equal to foster care expenses, up to $1,000 per child each year.
- Requires taxpayers to be under contract with the Department of Children and Family Services (DCFS) and provide care for at least 6 months in a taxable year to receive the full credit.
- Prorates the credit amount based on the number of days of care if the placement lasts less than 6 months during the taxable year.
- Allows taxpayers to carry forward any unused credit to offset taxes for up to five future years, applying it first to the earliest year with a tax liability.
Who It Names or Affects
- Illinois residents who are foster parents under contract with DCFS caring for qualifying dependent children.
- The Department of Children and Family Services (DCFS) and the Department of Revenue, which must work together to create rules for the program.
Terms To Know
- Tax Credit
- An amount that reduces the total tax a person owes dollar for dollar.
- Prorated
- Adjusted based on how many days of care were provided during the year if the child was cared for less than 6 months.
- Carry Forward
- Using an unused tax benefit from one year to lower taxes in future years, up to five years later.
Limits and Unknowns
- The credit cannot reduce a taxpayer's bill below zero.
- Specific rules for how the program works will be written by state agencies after the law takes effect.
- The law does not list specific types of expenses that count toward the $1,000 limit.